| | Based on our understanding of scarcity, we can now refine our definition of “economics”. “Economics” is the study of ''scarcity''. If there is no scarcity, then everyone has what they want. There is no scarcity of air, so economics does not study the everyday uses of air. But there is a scarcity of land and oil, so we do study how they are bought and sold. | | Based on our understanding of scarcity, we can now refine our definition of “economics”. “Economics” is the study of ''scarcity''. If there is no scarcity, then everyone has what they want. There is no scarcity of air, so economics does not study the everyday uses of air. But there is a scarcity of land and oil, so we do study how they are bought and sold. |
| | There was a famous bet made in 1980 after the liberal Paul Ehrlich claimed that an increase in world population would cause greater scarcity in basic natural resources, such as copper, chromium, nickel, tin, and tungsten. A "classical" (conservative) economist, Julian Simon, predicted that people would seek and find substitutes for scarce resources, such as other materials, and that this would prevent greater scarcity and higher prices. The wager was that the liberal Ehrlich predicted that the price of these metals (also called "commodities") copper, chromium, nickel, tin, and tungsten would increase in price by 1990; the conservative Simon predicted their prices would not increase. | | There was a famous bet made in 1980 after the liberal Paul Ehrlich claimed that an increase in world population would cause greater scarcity in basic natural resources, such as copper, chromium, nickel, tin, and tungsten. A "classical" (conservative) economist, Julian Simon, predicted that people would seek and find substitutes for scarce resources, such as other materials, and that this would prevent greater scarcity and higher prices. The wager was that the liberal Ehrlich predicted that the price of these metals (also called "commodities") copper, chromium, nickel, tin, and tungsten would increase in price by 1990; the conservative Simon predicted their prices would not increase. |